   Chapter 7, Problem 31BEB ### Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

#### Solutions

Chapter
Section ### Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
413 views

# Break-Even Sales Dollars for a Multiple-Product FirmChillmax Company now sells both pairs of shoes and carryalls. Next year, Chillmax expects to produce total revenue of $210,000 and incur total variable cost of$81,375. Total fixed cost is expected to be $91,500.Required: 1. Calculate the break-even point in sales dollars for Chillmax. (Note: Round the contribution margin ratio to four decimal places and sales to the nearest dollar.) 2. Check your answer by preparing a contribution margin income statement. 1. To determine Compute break-even point in sales dollars. Explanation Break-Even Point: The point or situation where the amount of total cost is equivalent to total revenue is known as the break-even point. It is the point where there is no loss or no profit. Use the following formula to calculate the break-even point in sales dollars: Break-even point in sales dollars=Fixed costsContribution margin ratio1 Substitute$91,500 for fixed costs and 61.25% for contribution margin ratio in the above formula.

Break-even point in sales dollars=$91,50061.25%=$149,388

Therefore, the break-even point in sales dollars is \$149,388

2.

To determine

Make contribution margin income statement.

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